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UK borrowing rose to £18.3bn in August, raising pressure before budget
Public sector net borrowing came in £2.9bn higher than a year earlier, and the deficit forecast is already set above plan as markets watch the Oct. 28 budget.
The UK government borrowed £18.3bn in August, a higher-than-expected figure that increases pressure on Chancellor John Healey ahead of the Oct. 28 budget, as economists warn further tax rises may be unavoidable. The Guardian Economics said the jump also aims to calm jittery bond markets before the government sets its next spending and tax plans.
Official figures released by the Office for National Statistics showed public sector net borrowing was £2.9bn higher last month than in August 2025, widening financial pressure. Borrowing also rose £3.5bn above what the Office for Budget Responsibility expected, taking the deficit for the financial year to date to £77.3bn, which is £8.1bn above forecast.
The August borrowing total exceeded City analysts' expectations of £15.6bn, and it follows a larger-than-expected £1.8bn deficit in July when analysts had expected a flat figure. Healey has pledged to stick within government spending limits that cap how much the Treasury can borrow as a share of national income.
The Guardian Economics added that the UK has faced pressure from higher interest rates on government debt amid financial market turmoil, even as financing costs eased somewhat in the prior week. It noted that the yield on 10-year UK bonds rose three basis points to 5.232%, while the 30-year bond yield also moved higher.